Reuters reported that a bankruptcy judge approved a settlement in which U.S. government-owned Ally Financial will pay $2.1 billion to its bankrupt unit Residential Capital.

According to Reuters, the bankruptcy court judge also made public a previously sealed examiner’s report concluding that Ally made missteps that left ResCap with an “unreasonably” small amount of capital before putting it into bankruptcy last year.

Reuters said the settlement is a key step in ResCap’s eventual exit from Chapter 11 protection. Ally currently owes the U.S. government about $10 billion on a $17 billion loan for a bailout during the financial crisis.

To read the entire Reuters story, Bloomberg: ResCap Wins Approval to Repay Ally, June 13, 2013